KUALA LUMPUR (Dec 12): The Ministry of Transport (MoT) has confirmed that the Malaysian Aviation Commission (Mavcom) will be merged with the recently-downgraded Civil Aviation Authority of Malaysia (CAAM), which will see the latter absorbing the economic and commercial functions of Mavcom.
In a statement today, MoT said the Cabinet approved the move at a meeting yesterday (Dec 11).
This follows a report by The Edge Financial Daily today that CAAM and Mavcom would be merged.
MoT said under the plan, Mavcom will be dissolved and its functions transferred to CAAM.
"The initiative to rationalise civil aviation regulatory bodies under one entity is not only to optimise human resources and available funds, but also to increase operational efficiency and service provision," said the ministry.
The rationalisation will involve several legislative changes, including the repeal of the Malaysian Aviation Commission Act 2015 (Act 771), under which Mavcom was set up in March 2016, as well as amendments to the Civil Aviation Authority of Malaysia Act 2017 (Act 788), which CAAM comes under.
The repeal of Mavcom's founding Act will allow for its functions to be transferred to CAAM, said MoT.
It added that it will simultaneously restructure CAAM's new organisational structure to ensure the rationalisation process is done with the intention of considering the new duties that CAAM will undertake.
The ministry went on to say that it will be conducting detailed discussions with the Ministry of Finance, the Public Services Department and the Attorney General's Chambers regarding the new structure, functions, powers, employment implications, finance and legal matters involving the merged regulator.
It views the manifestation of one civil aviation regulatory body that is comprehensive in nature will encourage the development of Malaysia's aviation industry while also raising the country's profile internationally.
It added that this initiative is in line with the current government's aim of rationalising the public sector, primarily to increase the efficiency and delivery speed for government agencies.
At the same time, the MoT said the move will help to further drive the development of the civil aviation sector in Malaysia, so that it becomes more competitive internationally, while adding that the government is committed to ensuring the civil aviation sector's development as per the National Transport Plan 2019-2030.
Citing sources, The Edge Financial Daily said the merger would serve to empower CAAM by consolidating both authorities to regulate economic and commercial matters as well as technical and safety matters.
Currently, Mavcom regulates the economic and commercial matters in Malaysia's civil aviation sector, while CAAM regulates the technical and safety aspects.
In an earlier statement today, Mavcom executive chairman Dr Nungsari Ahmad Radhi said Mavcom was disappointed with the merger, noting that the decision was made with "seeming disdain and without consultation with us".
Last month, the US Federal Aviation Administration downgraded CAAM from Category 1 to Category 2 after it failed an audit that was carried out in April. Due to being listed as a Category 2 regulator, airlines licensed by CAAM will not be able to add new routes to and from the US.
Following this, MoT has set up a special taskforce to address the downgrade.